S&P 500 Futures Update

Stops and Targets S&P 500 Futures
Stops and Targets S&P 500 Futures

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Two things to point out as we check in on the S&P 500 Futures on the first day after quarterly quadruple witching expiration:

  1. The previous Top Spotter setup signal never confirmed and has been invalidated today.  That was pretty much expected as explained in my last post.
  2. The Stops and Targets short-term stop/reverse line has finally moved higher after being stuck in limbo for what seems like forever.  Short-term stops from the gap fill stop/reverse buy at 2343 (adjusted for September contract pricing) that I pointed out on 5/17 now move up to 2412.50 to lock in profit.  *ES 2443.50 would be the first place for a counter-trend sell signal, should this poke back up falter.

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S&P 500 Futures Hourly Bars
S&P 500 Futures Hourly Bars

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Hate to sound like a broken record but we are right back to a touch of the Trump Trident Channel centerline right here.  That centerline has been acting as resistance for the past few months, so it’s worth watching again to see what happens.  This market has been absolutely guided by that powerful channel since election day in November.  At some point the channel paradigm will change and watching that centerline for clues is a pretty good way to keep your finger on the pulse.  That centerline was originally acting as powerful support but has been acting as resistance since early April.

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S&P 500 Futures Daily Bar/Range Chart
S&P 500 Futures Daily Bar/Range Chart

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The daily bar/range chart above shows the new higher short-term stop/reversal line at 2412.50 and the continuing interaction with the centerline of the Trump Trident Channel (shown in blue).  We are at that centerline resistance again, as I type.  If price turns back down then the first Stops and Targets counter-trend sell signal will be under 2412.50 and were that to happen we could conceivably see a move down to the bottom rail of the blue trident channel.  First things first, though, and for now all major trends are up above 2412.50 as we watch to see what happens here at the centerline.

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S&P 500 Futures Monthly Bars
S&P 500 Futures Monthly Bars

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Checking in on the monthly bars… The S&P 500 futures remain on track for the ‘price’ component of the very-long-term time/price target–but to my eye we might expect a correction at some point since the current ‘time’ trajectory angle appears perhaps a little too steep to be sustainable.

It’s all good until it ain’t for bulls and for now the nearest stop/reversal line is at 2412.50 as this market feels higher for a point of exhaustion for bulls and capitulation for bears.  I have been saying for some time now that when a tradable top eventually comes, I would expect unanimous confirmed top spotter signals on the indexes, which would be supported by corresponding huge numbers in the Russell 3000.  We didn’t get either of those with the (unconfirmed and now invalidated) spotters on 5/9.

I know the analysis has been a bit boring recently but this is the market we are in.  As I have said many times in the past…first the pros will bore you to tears–and then whammo, when least expected, the big move comes!  They have certainly been boring us in some respects as the sideways/up squeeze has progressed since losing the trident channel centerline support back in April.  With the close of the June contracts last Friday the pros will now have some distribution to attend to as they dispose of all the called equities.  What comes after that distribution is complete might be interesting…so stay alert for a change in the pattern and keep pushing those protective profit stops higher.

…my .02

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*Edit on 6/20/17:  The first short-term counter-trend sell signal from the current configuration would come on a move under 2443.50.  I incorrectly wrote 2412.50 in yesterday’s post under point 2 in the first section (now corrected).  ES 2412.50 is, in fact, the place where the first trend change would occur on a move underneath that new short-term stop/reverse line.

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